HHJ Brian Rawlings on 15^thMay 2018 handed down judgement in this case. Michael Kent QC and Peter Houghton instructed by Plexus appeared for the Claimant; Charles Feeny, instructed by Hill Dickinson appeared for the Defendant.  Mr Merritt worked for a painting and decorating company (Alick Whittle Limited) between 1975 and 1985, during which time he was exposed to asbestos and subsequently developed Mesothelioma. RSA provided employers’ liability insurance during the last 6 months of his employment, and thereby, by virtue of the Compensation Act 2006, were liable for the whole of his claim. As they were unable to locate any of the other insurers when Mr Merritt first brought his claim, RSA settled for a figure net of already paid benefits (£23,660.60 paid to CRU) of £124,255.40 plus £25,825.85 legal costs. Once the employers liability insurance tracing office was set up RSA were able to trace two other insurers that provided policies during the relevant employment period, and they sought “equitable contribution” from both. One, Aviva, provided this in line with the division of liability set out by RSA (corresponding to the percentage proportion of the total employment time) whereas the Defendant insurer refused to do so, claiming that their contribution claim was statute barred by Section 10 (1) Limitation Act 1980.

Key Issues:

HHJ Brian Rawlings set out the agreed position of the parties that: In order for Section 10 (1) Limitation Act (providing a two-year limit on claims, which was long passed in this case) to take effect, it was necessary to show that the claim RSA made against Generali was one covered by Section 1 (1) of the Civil Liability (Contribution) Act 1978. It was agreed by the parties that the answer was determined by the associated question of whether the indemnity provided by RSA to Alick Whittle Limited sounded in debt or damages.

This position is predicated on the Law Commission Report, which gave rise to the Civil Liability (Contribution) Act, which notes the following:

1. At paragraph 28: “However, we criticised the equitable rules for being insufficiently flexible where the persons concerned were jointly liable in damages. Our point, and it won almost unanimous support, was that the 1935 Act improved on the common law not only by allowing contribution proceedings between tortfeasor’s but also by requiring the court to allow D2 to pay such contribution “as may be just and equitable having regard to that person’s responsibility for the damage”. The significance of this requirement is that where D2 is more to blame for the damage than D1 he may, under the 1935 Act, be ordered to pay more by way of contribution. Equitable rules on the other hand provide that the loss is to be shared equally between D1 and D2 even where D2 is more to blame than D1, unless the balance of responsibility is so heavily tipped against D2 that complete indemnity is justified. This would mean that, in contribution proceedings between persons jointly liable in damagesfor breach of contract, the courts power to divide the damages justly and equitably, having regard to the responsibility of each for the damage, would no longer be fettered by the existing rules.” (emphasis added)
2. At paragraph 29: “It has been said that the existing rules can work unfairly in contribution proceedings between persons jointly liable for the same debt, for example between persons liable as partners, joint tenants or joint guarantors. The existing rules generally result in persons who are equally liable having to bear an equal share, without regard to the part they played in incurring the debt or the benefit, if any, that they derived under the agreement…. Our conclusion, so far as joint debtsare concerned, is that it is more important that the rule should be reasonably certain than that the court should have a wide discretion to redistribute the burden of each and every joint debt according to the general merits of the particular case. We accordingly make no recommendationfor changing the existing law of contribution as it applies to joint debts.” (emphasis added)

This issue was considered obiter by two Supreme Court judges, Lords Mance and Sumption in International Energy Group Limited v Zürich Insurance UK Branch[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][2015] UKSC 33; who came to opposite conclusions.

Lord Mance refers to the works of Colinvaux & Mirkin’s^[i]and Charles Mitchell^[ii]noting that they “suggest that it turns on whether liability under an indemnity insurance is regarded as “the right to be indemnified by a payment of money” or is, under a view which the authors suggest that the cases favour, regarded as arising from breach of an undertaking to prevent the insured risk from materialising…” He goes on to state that “It suffices to say that, if insurance contract liabilities are viewed as sounding in damages, it appears somewhat surprising if the 1978 Act could operate as an alternative statutory remedy with different effect in a case of true double insurance in respect of post–commencement liabilities.”

Lord Sumption states that “A contract of indemnity gives rise to an action for unliquidated damages, arising from the failure of the indemnifier to prevent the indemnified person from suffering damage, for example in a liability policy by having to pay the third party claimant” and refers to the case of Firma C-Trade SA v Newcastle Protection and Indemnity Association^[iii]as supporting this conclusion. He added that: “The class of persons “liable in respect of any damage suffered by another” [the requirement of Section 1(1) Civil Liability (Contribution) Act 1978] may include those liable in contract, and there is no reason to limit it to those who have themselves caused the damage, as opposed to those who have assumed a contractual liability in respect of it.”

It was also argued in the alternative for the Defendant that RSA should be put to proof on the reasonableness of the settlement.

Judgement:

HHJ Brian Rawlings made clear that he did not consider it necessary as such to choose between the positions of Lords Mance and Sumption as set out above. He considered the fact that the statements were obiter, and were expressly acknowledged by both judges not to be determinative. In light particularly of the lack of submissions and evidence on the point provided to them, he need not be bound by either position.

Instead he took the view that a number of cases referred to in Goff & Jones’ ‘The law of Unjust Enrichment’^[iv]provided binding authority for the proposition that an indemnity provided by insurers sounds in damages rather than in debt. His consideration of the case law is summarised here:

In Farnley v Dominion Insurance Co Limited^[v]Mr Justice Donaldson, at page 936 said “… All actions against insurers under an indemnity policy sound in unliquidated damages rather than debt (see Jabbour v Custodians of Israeli Absentee Property[1954] 1 WLR page 139, 143 seq. and the cases cited)”. HHJ Brian Rawlings noted from this both that Donaldson J confirmed that “all actions against insurers under indemnity policies sound in unliquidated damages rather than debt” and that it formed part of the ratio of his decision. He notes that the same is true of Mr Justice Donaldson in the case of Edmonds Lloyds italica & L’ Aancora Compagnia di Assicurazione e Riassicurazione S.P.A^[vi]

In the Jabbour case referred to by Mr Justice Donaldson in Farnley: ‘an English insurance company agreed to indemnify the plaintiff against loss in relation to a garage owned by the plaintiff in Haifa. The garage was blown up in a riot and the plaintiff left Palestine and went to Egypt. Under emergency regulations passed in December 1948, a custodian was appointed to all property belonging to “absentees” who had gone inter alia to Egypt, requiring that such property be delivered up to the custodian. The question was whether the plaintiff or the custodian was entitled to a payment from the insurance company.’

Mr Justice Pearson said in that case that: “it is established by many decided cases that such a claim is a claim for unliquidated damages……But the word “Damages” is puzzling and seems to be used in a rather unusual sense, because the right to indemnity arises, not by reason of any wrongful act or omission on the part of insurer (who did not promise that the loss would not happen or that he would prevent it) but only under his promise to indemnify the insured in the event of a loss.… The explanation of the use of the expression “unliquidated damages” to describe a claim for an indemnity under an insurance policy may be wholly or partly afforded by the old form of pleading in assumpsit, alleging a breach by non—payment, as in Castelli’s v Boddington.” Mr Justice Pearson went on to note that the claim for an indemnity under an insurance policy cannot be the subject matter of a garnishee order but was a chose an action that could be assigned. Thereafter Pearson J proceeded upon the basis that the claim under the insurance policy was a chose in action and not a debt, in determining the case.

HHJ Brian Rawlings notes thereby that “[w]hilst Pearson J did describe the use of the word “damages”, in connection with an insurers indemnity, as being used, in an unusual sense in that the indemnity did not, in his view, involve a promise by the insurer that the loss would not happen or that the insurer would prevent it, he nonetheless proceeded upon the basis, following the authorities to which he referred, that the claim was one in damages (a chose in action) and not in debt… However, in spite of that difference, in the analysis of the insurers promise, Pearson J’s judgement confirms that, based on the authorities to which he refers, the indemnity under an insurance contract is a Damages Indemnity Liability and not a Debt Indemnity Liability.”

The Judge thereby considered himself bound by the proposition that the liability of RSA to the Alick Whittle Limited is a liability sounding in damages rather than debt. It followed that RSA’s right of contribution from the Defendant falls within the Section 1 of 1978 Act (as agreed by the parties) and that it is therefore statute barred for the lapsing of the time limit in Section 10(1) of the Limitation Act 1980.

Though he acknowledged it was not strictly necessary to decide the point, he rejected the claim that RSA would have to be put to proof as to the reasonableness of their settlement with Mr Merritt for the following reasons:

1. He considered that the position of Lord Mance in IEG that apportioned liability not equally among insurers (as is usual) but in line with the percentage of time of exposure – owing to the unique nature of a “Fairchild” claim of this sort – was not advocating a broader ‘equitable’ approach. Rather it was a constrained expansion of the normal rules to accord with the nature of the exceptional claim.
2. He further stated that to permit such an expansion would produce highly undesirable uncertainty, which would lead to an increase in litigation as contribution would be disputed in almost every case of this kind.

KEY POINTS

On the basis of this judgment:

1. Claims of contribution between insurers are subject to the Civil Liability (Contribution) Act and therefore a 2 year limitation period under Section 10 of the Limitation Act 1980.
2. Claims will be assessed on a time exposed basis equivalent to that under Section 3 of the Compensation Act 2006.

Charles Feeny comments

“The forms of action we have buried, but they still rule us from their graves.”

Maitland, the Forms of Action at Common Law (1909).

In this case, the essential question was a simple one; in a claim for contribution between insurers, should the limitation period be six years or two years from the date of judgment or settlement?  Viewed as a simple question, there would be a very simple answer. That is that there is no justification for a period of longer than two years where the claim for contribution would have been known about and could have been brought prior to the judgment or settlement and where the Defendant will in the vast preponderance of cases be legally represented and most likely a corporate or insurer Defendant. To permit a period of six years in such circumstances would be an excessive indulgence inconsistent with the reasonable objective of promoting expedition in the resolution of legal disputes.

However, in answering this question, the Judge had to delve through much historical authority and in particular consider whether the claim for contribution was in debt or for damages, a distinction which is now almost entirely historic in the law. Whilst the Law Commission did decide that debt should not be brought under the Civil Liability (Contribution) Act 1978 because there was no justification for any judicial approach to apportionment of debt, there is no reason why such proceedings for contribution in debt should not equally have been subject to a two year limitation period.

The dangers of creating or protecting enclaves in the law were emphasised by Lord Rodger in Barker v Corus.  Ironically, Lord Rodger had been one of the procreators of the best known example, the Fairchild enclave.  Creating a special rule of causation to deal with the specific problem in mesothelioma claims inevitably created anomalies and tensions in analogous and related areas of the law.  With hindsight, it might have been thought that the Court of Appeal’s approach, much derided at the time suggesting that the answer lay in statute, would have been the wiser course.  Inevitably, further litigation followed from Fairchild and by the time of their decision in Sienkiewicz v Greif, the Supreme Court were in the words of one wry, if slightly unkind ,solicitor in danger of disappearing up their own enclave.

An enclave can be defined as “a place or group that is different in character from that which surrounds it.”  In these circumstances, it is reasonable to consider that insurance law is something of an enclave. Again, rather than adopting simple and pragmatic solutions to issues arising in the current state of litigation, the courts have looked back into the history of insurance and sought to apply this in what has become an increasingly strained way.  Whilst those steeped in insurance law no doubt have some great sentimental attachment to it and would not wish to see its more precious principles abandoned, the irony is that the ultimate outcome is very little different from that which would be achieved had a much more straightforward, indeed arguably simplistic, approach been taken.  There is ultimately little difference between deciding what appears to be fair and reasonable in the current commercial context from relying upon the “broad principles of equity”.  Similar comments could be made about litigation involving commercial contracts which centre upon detailed arguments about the construction of language which was probably not read by most of those involved in the formation of the contract and certainly not considered in the degree of detail which is thought appropriate for the purposes of resolving litigation.  The digital world is creating a different commercial environment with an emphasis on speed and informality in business dealings.  If the law is to be of value in this new commercial world, then the law itself will need to adapt and to offer the kind of swift and decisive problem solving which fits with the business practices of the litigants.

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[i]Insurance contract law (loose leaf ed), para C-0643

[ii]Law of Contribution and Reimbursement (2003), paras 4.13 and 4.43-4.44

[iii][1991] AC 1, 34 (Lord Goff of Chieveley)

[iv]9th edition paragraph 19 – 34

[v][1969] 1 Lloyds reports page 502

[vi][1986] 1 WLR 402[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

His Honour Judge Yelton on 12th May 2017 handed down judgment in this case.  The action was a fatal mesothelioma claim.  The deceased, Mr Bussey, was employed by the Defendants as a plumber carrying out predominantly domestic work in the period 1965 to 1968.  In particular, Mr Bussey worked on the installation of new boilers and was required to handle both asbestos rope and asbestos cement flue pipes.  He had to cut both the rope and flue pipes.  However, any work involving asbestos exposure was intermittent and for short periods only.

In the action, the Claimant (his widow) alleged that the exposure was foreseeably hazardous by contemporaneous standards of knowledge and that, in particular, it exceeded the levels in the guidance issued by the Factories Inspectorate in TDN13 of 1969.

The Judge considered the expert evidence , Mr Brady on behalf of the Claimant and Mr Glenn, on behalf of the Defendants ,and found that the exposure did not exceed the levels in TDN13 of 1969.  His Honour Judge Yelton did not accept that Mr Brady’s estimations of high levels of exposure for asbestos rope and for sweeping up after the completion of the works, taken from literature, were comparable to the deceased’s likely exposure.  The exposure was either to chrysotile or amosite, and under TDN13 the relevant level would be 2 fibre/ml for 4 hours.  Having rejected any exposure above the level of 4 fibre/ml and having found that the exposure was for minutes only, it followed inevitably that it could not have exceeded the levels in TDN13 of 1969.

The Claimant’s other argument was that even if the Judge found the levels did not exceed those in TDN13 of 1969, they should be found to amount to a breach of duty notwithstanding the decision in Williams v. The University of Birmingham.  The Claimant went so far as to suggest that the decision in Williams was per incuriam, which the Judge described as being “bold”.

The relevant period of exposure pre-dated the publication of TDN13, but nonetheless the Judge considered that it would be “perverse” to consider that any lower level of exposure would be relevant for the purposes of assessing reasonable foreseeability of risk.  The Judge considered himself bound by the decision in Williams which could not be distinguished, and indicated that any argument that the decision was per incuriam should be addressed to the Court of Appeal.

The decision in Williams has made it significantly more difficult for Claimants to recover damages in relation to asbestos exposures after 1965.  The game change in this respect, however, was not necessarily Williams, but rather the decision of the Supreme Court in Baker v. Quantum.  In Baker v. Quantum, a bare majority of the Supreme Court considered, not following Larner v. British Steel, that where a word in health and safety legislation referred to safety or risk of injury, the term should be construed in accordance with knowledge contemporaneous at the time of the relevant events as opposed to applying an objective approach which would bring current day knowledge into play.

In practical terms, the approach in Larner made it impossible for a Defendant to deny liability in any case to which the Asbestos Regulations 1969 applied, provided more than minimal exposure was proved , because of the definition of asbestos dust within the Regulations at Regulation 2(3):

“References in these Regulations to asbestos dust shall be taken to be references to dust consisting of or containing asbestos to such an extent as is liable to cause danger to the health of employed persons.”

Therefore, if exposure sufficient to increase the risk of mesothelioma to a material extent was proved (the causation test within Section 3 of the Compensation Act 2006) then applying Lana it would inevitably follow that there had been a breach of the Asbestos Regulations 1969.

All this was changed by Baker v. Quantum, which made it possible to argue that the exposure would not have been recognised as being foreseeably hazardous at the material time.

The decision in Williams is authority for the proposition, certainly prior to 1976, that the levels within TDN13 of 1969 are the best indication of levels which at the material time would be regarded as reasonably safe.

Not surprisingly, this decision has proved unpopular for those advising Claimants and several possible attacks upon it have been suggested, some of which were deployed in the Bussey case. The potential arguments appear to be as follows:

The levels in TDN13 of 1969 were based on epidemiology relating to the risk of asbestosis and, as shown in hindsight, to be unsustainable. This is correct, but this was the only epidemiology available at the time.  There does not appear to have been any significant criticism of the levels at the time they were introduced (other than from the asbestos industry which considered them to be too low).  They were used by the Factories Inspectorate and the Health & Safety Executive over a period of years without criticism.

The guidance was only to inspectors so as to inform when they should prosecute, and it is specifically indicated in TDN13 that ultimately the interpretation of Regulation 2(3) is a matter for the Courts.  Again correct, but there was no other guidance available and no decision of the Courts indicating that the guidance was inappropriate.

That the decision in Williams related to an occupier, not an employer.  Again correct.  However, it is difficult to see why this should make any difference.  In fact, given that TDN13 of 1969 was guidance issued in the context of employment, the converse might be more arguable.  In any event, as above, it was the only available guidance.

The decision in Williams was per incuriam, in particular because reference was not made to observations in both Jeromson and Maguire which indicated that asbestos exposure should be reduced to the lowest level practicable.  The problem with this argument, as pointed out by Mrs Justice Swift in the case of Abraham v. Ireson, is that the comments in Jeromson and Maguire were dealing with a different factual situation, that is cases where significant exposures were proved and the possibility of risk at least identified.  On analysis, there is nothing in the judgments in the Court of Appeal in these two cases which would obviate the need, in accordance with conventional principles in relation to the tort of negligence, to prove that the Defendants should have identified a reasonably foreseeable risk of injury.

His Honour Judge Yelton refused permission to appeal and it remains to be seen whether the Court of Appeal will grant permission.  Williams has been followed in a number of High Court cases now, including those cited in the judgment, that is McCarthy, Woodward and Smith and also in the case of McGregor v. Genco.

 

Case Background

This was an appeal by the appellant Defendants against the decision of the Court of Appeal in which they held that the Defendants were liable for breach of statutory duty under Asbestos Industry Regulations 1931 regulation 2(a). The respondent Claimant cross appealed against the decision that the Defendants were not in breach of their statutory duty under the Factories Act 1937 section 47.

The Claimant died of mesothelioma shortly before the hearing in the Supreme Court. Mr McDonald was a lorry driver who, as part of his employment, would attend Battersea Power Station to collect pulverised fuel ash. Between 1954 and January 1957 he was at the power station approximately twice a month. Between January 1957 and March 1959 he was there roughly twice every three months. The power station did not contain asbestos in its raw sense but did contain asbestos based lagging. While at the power station the Claimant would visit other areas and so, it was argued, came into contact with asbestos dust generated through the lagging. In order to create the lagging paste, asbestos powder was mixed with water in large drums. At first instance the judge found that the Claimant’s exposure had been modest.

Two issues were before the Supreme Court:

1. The applicability of regulation 2(a) of the Asbestos Industry Regulations 1931 to factories not involved in the manufacturing of asbestos products; and
2. Whether the Defendant had breached its statutory duty under section 47 of the Factories Act 1937.

On the first ground of appeal their Lordships were divided by a majority of 3:2; Lords Kerr and Clarke, and Lady Hale held that regulation 2(a) did apply in the instant case whereas Lords Neuberger and Reed held that it did not. On the second ground, the court rejected the Claimant’s argument that the Defendants had breached their duty under section 47 by a majority of 4:1 (Lady Hale dissenting).

The majority of the court took the opinion that the 1931 Regulations were not confined to a clearly identifiable asbestos industry and extended to all industries where certain specified processes were carried out. The decision in Shell Tankers UK v Jeromson [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][2001] EWCA Civ 101 (also known as the decision in Cherry Tree) was applied. Following on from this reasoning, the majority held that the term ‘mixing’, as contained in the preamble to the 1931 Regulations, was not to be given a restrictive, technical, meaning but a broad meaning which included mixing asbestos powder with water for the purpose of making a paste. In contrast Lord Reed (with whom Lord Neuberger agreed) took the opinion that, on a reading of the Regulations, combined with the historical background and subsequent legislation, the Regulations were not intended to apply to power stations and the term ‘mixing’ had a technical meaning.

When addressing the cross appeal it was accepted that to succeed under section 47 that the Claimant must show: (1) that the dust was given off in connection with a process carried on in the power station; (2) that he was a ‘person employed’ within the meaning of the section; (3) the quantity of dust given off was substantial; and (4) that he inhaled the dust given off by the relevant process. The majority held that, based upon the trial judge’s conclusions, the Claimant had not been exposed to a substantial quantity of dust. All members of the panel accepted that process should be given its ordinary meaning. In addressing a ‘person employed’, the emphasis should be on the need for protection rather than the involvement in a process and that it was sufficient that the Claimant was employed in the station rather than by the station’s operator. When addressing substantial, the court rejected the Defendant’s submission that it must be substantial at point of inhalation as opposed to at the time of giving off.

Contributor Comments

The majority decision has essentially confirmed the earlier decision of the Court of Appeal in Cherry Tree (Shell Tankers UK v Jeromson [2001] EWCA Civ 101), where Lady Hale, then Hale LJ, gave the leading judgment.

The essential issue, that is whether the Asbestos Industries Regulations could be applied to factories, not within the asbestos industry, but where processes as described in the Regulations were in fact being carried out, could plausibly be argued either way, as evidenced by this finely balanced decision.  Ultimately, the difference is one of basic approach; that is the majority’s liberal approach or the minority’s conservative approach.  The liberal approach essentially considers that there is no good reason why the Regulations should not be applied beyond the situations originally envisaged where the same risk is present and where all other facts necessary to prove a breach of the Regulations are established. Whereas the minority take the view that, in the context of penal legislation, the same should only be applied in the explicit context in which it came into force otherwise there could be inadvertent criminal liability.  This view is reinforced by the result of the cross-appeal, where it was accepted that there had been no breach of the Factories Act (which would be the legislation with which the Defendant’s predecessors would have sought to comply).  There is no evidence, or reason, to believe that they ever considered that the Asbestos Industry Regulations 1931 would apply to their premises.

The dismissal of the cross-appeal, albeit with Lady Hale dissenting, appears less debatable, although Lord Kerr left the door open to an extent, referring to the lack of evidence of visible dust.  However, to find that the mere visibility of dust would make it substantial would not be consistent with the approach under the Factories Act. Intermittent and moderate exposures were tolerated under the Act and this was, in fact, the finding at first instance in the Cherry Tree case.

In practical terms, whilst this was always an interesting issue, the decision will have little effect on future cases. The Asbestos Industry Regulations were repealed with the coming into force of the Asbestos Regulations 1969. It is likely that more and more mesothelioma claims will relate to exposures in the 1970s and 1980s, where very different issues will arise. Further, the Asbestos Industry Regulations became of lesser relevance after 1965, and the publication of the risk of mesothelioma from low level exposures.

It is clear from considering the processes within the Asbestos Industry Regulations 1931 that most will only have been carried out within asbestos factories and probably the only significant exception is that seen in this case and the Cherry Tree case; that is the mixing of asbestos in other factory premises. This case will, therefore have relevance in practical terms to claims pre-1965 where mixing in factory premises is approved.

It may be that this decision will be ultimately considered most significant in relation to changing judicial trends and the acceptance of a more conservative approach to liability in personal injury claims by the minority.  It is reasonable to consider that for most of the past decade the approach of the appellate courts, in particular in the context of disease claims, has been a liberal one usually resulting in liability either for breach or causation. Despite this, a different trend may be emerging which might encourage Defendants to approach the appellate courts with more hope.

Note

Issues relating to asbestos exposures in the 1970s and 1980s and mesothelioma claims are discussed in the pro-vide webinar “Mesothelioma – a new generation of claims”.

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Case Background

John Dowdall had been exposed to asbestos through a greater part of his working life. In June 1998 he was diagnosed as suffering from asbestosis and pleural plaques and later that year started legal proceedings against seven of his former employers (the first action). At the time of the first action the only symptomatic injury which the Claimant was suffering from was asbestosis. In April 2003 the Claimant obtained a judgment against the seven Defendants to that action for the sum of £26,000 and it was accepted that this was in full and final settlement against those Defendants. The judgment related to the Claimant’s actual damage (the asbestosis) and the risk of developing mesothelioma. A claim for provisional damages, relating to the risk that the Claimant would later develop a serious disease or condition, was made but not pursued.

Unfortunately, the Claimant subsequently developed mesothelioma and sought damages against the three Defendants. The court was required to reach a decision on three issues:

1. whether the second proceedings were an abuse of process;
2. whether the Claimant was estopped from bringing the second proceedings; and
3. whether the second proceedings were barred under the provision of the Limitation Act 1980.

Ultimately, the court dismissed the Defendants’ submissions and concluded that the Claimant was entitled to bring a claim for the mesothelioma. In considering whether the claim was an abuse of process, the court followed the guidance laid down in Henderson v Henderson (1843) 3 Hare 100, as developed by Lord Bingham in Johnson v Gore-Wood (No.1) [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][2002] AC 1 (HL), and concluded that the decision not to sue the current Defendants in the first action was honestly made and that the Claimant had not manipulated the process of the court with his intention of ‘having his cake and eating it’ (see paragraph 35). The decision not to sue the Defendants in the first action was taken on the basis that they could not be located after proper enquiries had been made.

The court rejected the argument that the 2003 judgment was intended to represent the full measure of his estimated loss. The Defendants brought an argument based upon the decisions in Jameson v Central Electricity Generating Board [2000] 1 AC 455 and Heaton v AXA Equity & Law Life Assurance Society [2002] 2 AC 329 that the order included damages for the risk of contacting mesothelioma. The court rejected this and concluded, ‘it is quite clear…that the action for damages for mesothelioma is not conceptually the same as an action for the risk of mesothelioma’ (at paragraph 45) and, on that basis, said it was clear that the Claimant had not accepted a sum which was intended to represent the full measure of his estimated loss.

The judge concluded that the Claimant did have knowledge within the meaning of s.14(1)(b) of the Limitation Act 1980 Act in June 1998 as far as the second and third Defendants were concerned and 12 months later as concerned the first Defendant. However, the court considered it appropriate to dis-apply the limitation period by virtue of section 33. The court was particularly mindful of the fact that the Claimant had a substantial claim for a very serious injury and that he had a very good prospect of establishing liability agains the Defendants.

 Contributor Comments

This case raises issues which have arisen in the past decade, but this appears to be the first occasion upon which such issues have been litigated to a conclusion.

The opportunity to pursue further Defendants in these circumstances arises because of greater openness in the insurance industry, in particular through the employer’s liability tracing office.

Whilst in the circumstances the Defendant’s arguments clearly merited serious consideration, the Deputy High Court Judge’s approach was consistent with authority.  It would be difficult to argue that the second action was an abuse in the face of a clear finding that the first action had not been settled for full value and the Claimant’s conduct in relation to that action could not be criticised.

The question of whether the settlement of the first action was at full value is made more difficult by the problem in reconciling the decisions in Jameson v Central Electricity Generating Board [2000] 1 AC 455 and Heaton v AXA Equity & Law Life Assurance Society [2002] 2 AC 329, notwithstanding the attempts of the Law Lords in the latter case to achieve such reconciliation.  However, it appears reasonable to assume that Jameson will only be followed in circumstances in which there is clear evidence that the first action was settled at full value, which in most circumstances would render the second action unnecessary.

In relation to limitation, whilst the one action rule remains the law in practice it appears to be circumvented by limitation and findings; in particular, Claimants, as here, obtaining a Section 33 discretion when proceeding for a malignant condition having previously had knowledge of a benign condition.  The courts only appear willing to entertain limitation defence in asbestos cases where the Claimant is bringing an action for the same condition in respect to which he had earlier knowledge; see Buckler v Sheffield City Council [2004] EWCA Civ 920 and Collins v Secretary of State for Business Innovation and Skills [2013] EWHC 1117 (QB).

Given the nature of the application, the Deputy High Court Judge did not have to consider what might be the most difficult issue, that is whether the Claimant should give credit in his current action for the full value of the earlier Defendant’s contribution to the risk of him developing mesothelioma; in other words he had accepted an apportioned approach by his agreement to full and final damages in the earlier action.  The nature of the cause of action in these circumstances has been something of an intellectual rollercoaster ride through Fairchild, Berkeley, Section 3 of the Compensation Act 2006 and the Trigger litigation.  There may be developments or even surprises in the Supreme Court decision in IEG (International Energy Group v Zurich Insurance Plc UK).  However, it appears reasonably arguable that the Claimant should give credit in these circumstances, not just for the sums received from the Defendants in respect of the risk of mesothelioma, but for the full value of those Defendants’ contribution to the risk.  Otherwise, at least, in this respect, he is having his cake and eating it.  The Claimant, in agreeing to a full and final settlement in the earlier action, was accepting against those Defendants that he should not be entitled to further damages if he, in fact, developed mesothelioma.  It is difficult to see why he should now receive these sums via another route, in particular where he has had to rely upon the court’s discretion under Section 33 of the Limitation Act.  The modified Jameson approach could result in it being accepted that the Claimant had received full value in respect of the risk created by the earlier Defendants and have to give credit for the value of this in his current action.  Such an approach would have the result of the clear injustice of the Defendants to the first action now facing contribution claims being avoided.

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Case Background

In this note Charles Feeny and Professor Damien McElvenny of the Institute of Occupational Medicine discuss the legal and epidemiological reasoning behind synergy.

The synergistic relationship between tobacco and asbestos was considered in the Australian case of Amaca Pty Ltd v Ellis [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][2010] HCA 5. The plaintiff was the executrix of her husband, Mr Cotton, who died of lung cancer. Mr Cotton had been a heavy smoker and was exposed to low levels of asbestos during his working life. The evidence at trial did not show that this was a cancer peculiarly associated with exposure to asbestos. The court was asked to determine whether it was more probable than not that the asbestos caused the cancer. Key to the plaintiff’s case was the argument that there was a synergistic relationship between tobacco smoke and asbestos.

At first instance the defendants were held liable. By a majority the appeal to the Court of Appeal of Western Australia was dismissed however, the appeal to the High Court of Australia was upheld.

Contributor Comments

Prof. McElvenny’s note (below) confirms the potent causative effect of synergy when there are significantly elevated risks, both from asbestos exposure and cigarette smoking. In these circumstances, the contribution to risk from exposure to asbestos when the synergy is taken into account is so strong that it is reasonable to infer that the victim would not have suffered from carcinoma in the absence of asbestos exposure. It may be that this perception of the effects of synergy has resulted in a belief that the increased risk of causation from synergy will result in causation by both factors, where both are known to be present. This erroneous belief appears to have been reflected in Lord Phillips’ comments in Sienkiewicz v Grief [2011] UKSC 10,

“Epidemiological evidence indicated that, had the victim not been a smoker, his exposure to asbestos would have more than doubled the risk that he would get lung cancer. I do not, however, see that it was essential for the Claimant to prove this” (paragraph 76).

And,

“For reasons that I have already explained, I see no reason for the application of the “doubles the risk” test in cases where two agents have operated cumulatively and simultaneously causing the onset of a disease. In such a case the ruling in Bonnington applies” (paragraph 90).

The Supreme Court in Sienkiewicz did not have the advantage of detailed evidence on relative risk and synergy in cases of carcinoma of the lung. However, in such cases the crucial issue is likely to be whether there was sufficient evidence of exposure to asbestos to make synergy a relevant factor which, in practical terms, involves proving at least a doubling of risk from asbestos exposure.

These issues were well illustrated and subject to detailed evidence in the Australian authority of Ellis (Cotton) v Amica Property Limited [2010] HCA 5. The case involved a man with slight asbestos exposure and a heavy smoking history. There were a number of estimations of relative risk from these two sources but the one specifically quoted in the decision of the High Court of Australia was that of Professor Berry, as follows:

1. Due to smoking alone 92%
2. Due to asbestos alone 0.1%
3. Due to smoking-asbestos combination 0.9%
4. Background risk 7%

The High Court in Australia, allowing the Defendant’s appeal, rejected an argument which was essentially to the effect that synergy must implicate asbestos in the causation of asbestos related carcinoma of the lung, where asbestos exposure was known to have occurred. This was clearly set out in the dissenting judgment of Martin C.J. in the first appeal to the Court of Appeal of Western Australia ([2006] WASC 270):

“When the analysis undertaken by Mr Rogers (and others) is properly understood there is, with respect to the trial judge, no unspecified fallacy in the calculations. That is because, it does not follow from the synergistic effect that the instances of cancer due to a combination of asbestos exposure and smoking, must be greater than the incidence attributable to smoking alone in a group of cancer sufferers who have been exposed to both tobacco smoke and asbestos. Rather, the proportion within the group of cancer sufferers (as opposed to a group of community members generally) who would have suffered their disease irrespective of exposure to one or other of the carcinogens depends critically upon the assumptions made with respect to the levels of exposure. If the assumption is of a high level of exposure to tobacco smoke and a low level of exposure to asbestos, the evidence of all the experts (with the possible exception of Dr Leigh to whom I will refer below), was to the effect that the largest cohort within the group of cancer sufferers will be those who would have suffered lung cancer irrespective of exposure to asbestos. Conversely, if the assumption is of a group of cancer sufferers who have a slight history of smoking and a history of heavy exposure to asbestos, the largest group will be those who would have suffered lung cancer irrespective of their exposure to tobacco smoke. In either of these assumed cases, the group who would only have contracted lung cancer because of their exposure to both carcinogens will be much smaller than the group who would have contracted lung cancer because of their exposure to the predominant carcinogen, irrespective of their minor exposure to the other carcinogen.” (Paragraph 207)

The High Court of Australia made similar comments (at paragraph 57):

“It may be accepted (at least for the purposes of debate) that the synergistic or multiplicative effect suggests that in some cases the two carcinogens will have contributed to the development of an individual patient’s cancer. But the proposition which the plaintiff advanced was an absolute proposition of universal application:  smoking and asbestos must work together and they must have worked together in this case. That proposition was not established.”

This point was reinforced by the court at paragraph 60:

“If the description of exposure to smoking and asbestos as “more dangerous” than exposure to one or the other was intended to reflect a quantitative comparison of risk, it is a description that did not accurately reflect the evidence given by the witnesses about the relative risks of smoking compared with the relative risks of exposure to asbestos. And if the description “more dangerous” was intended to convey no more than that those who were exposed to both smoking and asbestos were at greater risk of developing cancer than those who were exposed to only one of those carcinogens, it is necessary to bear steadily in mind that the evidence did not establish that smoking and asbestos must work together.”

The Claimant’s arguments, based upon the evidence of Dr James Leigh, ultimately try to make the risk from asbestos exposure in carcinoma of the lung equivalent to the stochastic risk known to exist in mesothelioma claims. However, there are clear distinctions between the two. In a mesothelioma claim, unless there is some argument that the mesothelioma is idiopathic, the causation issue is that it could not be proved which of any particular exposures had been causative, as any one on its own could have been the cause. The Fairchild exception was essentially created to avoid the undesirable result flowing from the logic of this argument. However, in a carcinoma of the lung case, as in Cotton (Ellis) the issue is not which exposure was causative but whether the asbestos exposure could be considered causative at all. In this context, Professor Berry’s figures indicated that, even with the synergistic effect taken into account, the chance of the victim’s carcinoma being related to asbestos was at the 1% level, whereas there was a 92% chance that it was related to cigarette smoking alone. This, therefore, is an argument that can be disposed of on a conventional basis.

Clearly, within a cohort of 100 persons with similar histories and similar diagnosis, there will be one who in fact suffered carcinoma of the lung as a result of asbestos exposure, but as Patrick Walsh of Pannone pointed out, in the discussion in the webinar (Causation in asbestos: Minimal or material? Risk or probability), there is no way in the absence of any medical or pathological evidence that it can be established whether a particular victim was this one person, as opposed to being one of the 92 who suffered from carcinoma of the lung as a result of their cigarette smoking habit.

Synergy (asbestos and tobacco smoking and the risk of lung cancer)- Damien McElvenny

Using data from Hammond et al (Hammond EC, Selikoff IJ, Seidman H (1979). Asbestos exposure, cigarette smoking and death rates. Ann N Y Acad Sci 1979; 330: 473-490), the relative risk (this can be thought of as approximately the ratio of the probability of getting the disease if exposed divided by the probability of getting the disease if unexposed) of lung cancer from tobacco smoking versus not tobacco smoking was approximately 10, and in non-smokers, the relative risk from exposure to asbestos was approximately 5.  These risks may be higher or lower in other working populations depending on the level of asbestos exposure and the level of tobacco smoking, and so are used for illustrative purposes only.  These relative risks can be represented by the following table, where the relative risk from asbestos 5 (in non-smokers) is the value in bold:

Relative risk		Relative risk of tobacco smoking
		Smoker	Non-Smoker
Relative risk of asbestos	Exposed		5.0
	Unexposed	10.0	1.0

If the effects on lung cancer from tobacco smoking and asbestos exposure were completely independent of each other (i.e. didn’t interact in any way), then the excess relative risks (the amount of relative risk above 1.0) would be additive and the table of relative risks would be as shown below (as before the relative risks for asbestos are in bold):

Relative risk		Relative risk of tobacco smoking
		Smoker	Non-Smoker
Relative risk of asbestos	Exposed	14.0	5.0
	Unexposed	10.0	1.0

In this (non-interaction) scenario, for every lung cancer case in a non-smoker unexposed to asbestos, there will be an additional 13 cases of lung cancer, 9 of which are due to tobacco smoking and 4 of which are due to asbestos.  However, because the cases in practice will be clinically indistinguishable from each other, we cannot say which cases are due to which exposure, nor say which cases are the ones that would have happened anyway.  If we knew a case didn’t have either exposure (i.e. didn’t smoke and weren’t exposed to asbestos), they are most likely to be one of the background cases (i.e. a case caused by some other lung carcinogen).  If they had exposure to asbestos in the absence of tobacco smoking, then asbestos would be the most likely cause, and ditto for tobacco smoking in the absence of asbestos exposure.  Where it is a little more difficult, is in the situation where a lung cancer case has had both exposures.  Here, we would have to say on the balance of probabilities that the case is most likely due to tobacco smoking (9 cases due to tobacco smoking versus 4 due to asbestos exposure).  (This could be further refined if levels of exposure were taken into account).

If the effects are synergistic in a fully multiplicative way, which is believed to be approximately the actual situation, then we have the following table (as before the relative risks for asbestos are in bold):

Relative risk		Relative risk of tobacco smoking
		Smoker	Non-Smoker
Relative risk of asbestos	Exposed	50.0	5.0
	Unexposed	10.0	1.0

In this scenario, the individual effects of asbestos and tobacco smoking in the absence of each other (or both) are the same, but now we have 49 excess cases for every case unexposed to either causal agent, 36 (49-13) of which are due to the synergy or multiplicative effect of asbestos and tobacco smoke.  Under the synergy model, the majority of the lung cancer cases (36 out of 50) are due to the synergy.  Unlike for the additive model, for those cases with both exposures, we’re not able to reach a judgment on whether asbestos or tobacco smoking is the most likely cause.  Here (because they are clinically indistinguishable from each other), we can only say that they are jointly responsible (the “but for” test), since the removal of either cause, would prevent these 36 excess cases due to the synergistic effect from occurring.

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